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Monday, December 6, 2010
UK Citizen Pleads Guilty to Conspiring to Bribe Nigerian Government Officials to Obtain Lucrative Contracts as Part of KBR Joint Venture Scheme

WASHINGTON – Wojciech J. Chodan, a former commercial vice president and consultant to a United Kingdom subsidiary of Kellogg, Brown & Root Inc. (KBR), pleaded guilty today to conspiring to violate the Foreign Corrupt Practices Act (FCPA) for his participation in a decade-long scheme to bribe Nigerian government officials to obtain engineering, procurement and construction (EPC) contracts, the Department of Justice announced. The EPC contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria, were valued at more than $6 billion.

Chodan, 72, a U.K. citizen, was extradited from the United Kingdom to the United States on Dec. 3, 2010, and pleaded guilty today in U.S. District Court in Houston before U.S. District Judge Keith P. Ellison to one count of conspiracy to violate the FCPA. Chodan was originally charged on Feb. 17, 2009. Sentencing has been scheduled for Feb. 22, 2011. Chodan faces a maximum penalty of 60 months in prison on the conspiracy charge. As part of his plea agreement, Chodan agreed to forfeit $726,885.

KBR, Technip S.A. (Technip), Snamprogetti Netherlands B.V. (Snamprogetti) and a Japanese engineering and construction company were part of a four-company joint venture that was awarded four EPC contracts by Nigeria LNG Ltd. (NLNG) between 1995 and 2004 to build LNG facilities on Bonny Island. Chodan admitted that from approximately 1994 through June 2004, he and his co-conspirators agreed to pay bribes to Nigerian government officials, including top-level executive branch officials, in order to obtain and retain the EPC contracts. Chodan recommended and agreed to the joint venture’s hiring of two agents, Jeffrey Tesler and a Japanese trading company, to pay the bribes. During the course of the bribery scheme, the joint venture paid approximately $132 million to a Gibraltar corporation controlled by Tesler and more than $50 million to the Japanese trading company. At crucial junctures preceding the award of EPC contracts, Chodan and his co-conspirators met with successive holders of a top-level office in the executive branch of the Nigerian government to ask the office holders to designate a representative with whom the joint venture should negotiate the bribes to Nigerian government officials.

In related cases, KBR’s former CEO, Albert "Jack" Stanley, pleaded guilty in September 2008 to conspiring to violate the FCPA for his participation in the bribery scheme, while KBR’s successor company, Kellogg Brown & Root LLC, pleaded guilty in February 2009 to FCPA-related charges for its participation in the scheme to bribe Nigerian government officials. Kellogg Brown & Root LLC was ordered to pay a $402 million fine and to retain an independent compliance monitor for a three-year period to review the design and implementation of its compliance program. In addition, Tesler was indicted in February 2009 on FCPA-related charges for his alleged participation in the bribery scheme, and the United States has requested his extradition from the United Kingdom.

In another related criminal case, the department filed a deferred prosecution agreement and criminal information against Technip on June 28, 2010. According to that agreement, Technip agreed to pay a $240 million criminal penalty and to retain an independent compliance monitor for two years. On July 7, 2010, the department filed a deferred prosecution agreement and criminal information against Snamprogetti Netherlands BV, which also agreed to pay a $240 million criminal penalty.

The case is being prosecuted by Assistant Chief William J. Stuckwisch and Deputy Chief Patrick F. Stokes of the Criminal Division’s Fraud Section, with investigative assistance from the FBI-Houston Division. The Criminal Division’s Office of International Affairs provided substantial assistance. Significant assistance was provided by the SEC’s Division of Enforcement and by authorities in France, Italy, Switzerland and the United Kingdom, including in particular the Crown Prosecution Service, the Serious Fraud Office’s International Assistance and Anti-Corruption Units, the London Metropolitan Police and the City of London Police.

10-1391
Criminal Division
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